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The New England Journal of Medicine recently published the second annual report from the Oregon Health Study, a large-scale experiment in health care, economics, and social policy. Results are mixed. Results are also politically charged, because they involve Medicaid, which the Affordable Care Act (aka Obamacare) aims to enlarge to cover some 20 million uninsured low-income Americans.

It appears that access to health care through Medicaid does not guarantee better test results on common predictors of ill health. The experiment eventually may show if there are benefits in actual health and actual life expectancy. For now, opponents of Obamacare are using the study to warn that the program won't work, or isn't worth the money.

The study does show that access to Medicaid helps people avoid being impoverished by catastrophic health-care costs. And a lower rate of severe depression may show that some people have better mental health if they have fewer things to worry about. For now, supporters of Obamacare are using these study results to show that there are good reasons to add more people to the Medicaid rolls.

The Oregon health-insurance experiment is acknowledged to be the best-designed study ever conducted to gather field data on health care and health insurance. Normally, researchers would consider it unethical to take a population of needy people and give half of them free health care while denying it to the other group purely by chance. Even though that's the way a good experiment should be designed, researchers don't allow themselves to treat people that way. But in 2008, the Oregon Health Plan, the state's version of Medicaid, accidentally created that situation, and the researchers were able to take advantage.

Because of a state budget crisis, the Oregon Health Plan was closed to new applicants after 2004. In early 2008, the state decided it could afford to add 10,000 people to the rolls for free health care. Unfortunately for the state, about 90,000 people were qualified to join the plan. Oregon held a lottery to pick the 10,000 randomly.

This was an opportunity for a randomized clinical trial of free health care. Researchers obtained data from 6,387 adults who were among the lottery winners and 5,842 adults who also wanted to join the Oregon Health Plan but were not selected.

The researchers recorded data from both groups on their blood pressure, cholesterol, glycated hemoglobin (a warning signal for diabetes), screening for depression, and medications being taken. They also asked both groups to report their diagnoses, health status, how much health care they were using, and how much they had to spend out of pocket for health care.

They found that putting people on Medicaid gave them much more access to health care, even though about 20% of Oregon doctors refuse to see Medicaid patients because its payments are so low.

Unfortunately, going to a doctor more frequently did not change the lottery winners' rate of diagnosis of high blood pressure or high cholesterol, nor did it change their use of medication for these conditions, compared with the control group that did not join the Oregon Health Plan.

For diabetes, Medicaid coverage significantly increased the probability of a diagnosis of diabetes and the use of diabetes medication compared with the control group, but there was no significant difference on average glycated-hemoglobin levels or on the percentage of participants with levels above the warning threshold of 6.5%.

Medicaid coverage fulfilled the traditional role of health insurance by nearly eliminating catastrophic out-of-pocket medical expenditures (defined as spending more than 30% of annual income). Those with Medicaid had a lower probability of a positive screening for clinical depression, and they increased the use of many preventive services, such as mammograms and regular checkups.

Bottom line: Adding people to the Medicaid rolls not surprisingly increases the cost of running the Medicaid program; more surprisingly, significant health benefits to the lottery winners were hard to see, or they may not show up in measurable statistics until more time has elapsed.

If more people take medicine well known to lower the risks of diabetes and heart disease, those people should eventually show the benefits. Regular checkups and mammographies are believed to reduce the risk of cancer, among other things. The treatments may not pay off for decades, but it's too soon to say they will never pay off. If they don't pay off, the medical establishment should change the practice for everyone.

The inference from Oregon that should concern all of us is the possibility that health insurance, whether provided by the government in Medicaid, by our employers, or even by our own expenditures, does not much improve "wellness" in the short term. Other studies—and experience from socialized medicine in other countries—also suggest that a lot of routine care will catch and avert life-threatening ailments for a few people, at a high cost for all.

The Oregon experiment suggests that most Americans, not just Medicaid beneficiaries, receive excessive health care of debatable utility. We will never change the rising cost of health care if everyone, rich and poor, young and old, insured and uninsured, receives all the health care they want with little or no out-of-pocket expense.

No Bull Too Great

Abelson the eternal skeptic

Alan Abelson, who made Barron's in his own image, loved to wave a red cape in front of any bull. No good news was too good to question; no high price was too wonderful to doubt; no soaring earnings were too solid to check out. In his first column, he declared, "Whatever it portends, 1966 has started out as the year of the most common stock."

He went on for more than 2,000 columns, through two gigantic bull markets and innumerable hot stocks. As he said in 1996, "This great bull market defies analysis, at least of the usual kind (one can make the case that Freud and Jung are better guides on this score than Graham and Dodd)."